'Mania' For Home Ownership
Americans' love of their homes is widely known and acknowledged; however, many believe that enthusiasm for home ownership is currently high even by American standards, calling the real estate market "frothy", "speculative madness", and a "mania". Many observers have commented on this phenomenon—as evidenced by the cover of the June 13, 2005 issue of Time Magazine (itself taken as a sign of the bubble's peak)—but as a 2007 article in Forbes warns, "to realize that America's mania for home-buying is out of all proportion to sober reality, one needs to look no further than the current subprime lending mess... As interest rates—and mortgage payments—have started to climb, many of these new owners are having difficulty making ends meet... Those borrowers are much worse off than before they bought." The boom in housing has also created a boom in the real estate profession; for example, California has a record half-million real estate licencees—one for every 52 adults living in the state, up 57% in the last five years.
The overall U.S. homeownership rate increased from 64 percent in 1994 (about where it was since 1980) to a peak in 2004 with an all-time high of 69.2 percent. Bush's 2004 campaign slogan "the ownership society" indicates the strong preference and societal influence of Americans to own the homes they live in, as opposed to renting. However, in many parts of the United States, rent does not cover mortgage costs; the national median mortgage payment is $1,687 per month, nearly twice the median rent payment of $868 per month, although this ratio can vary significantly from market to market.
Suspicious Activity Reports pertaining to Mortgage fraud increased by 1,411 percent between 1997 and 2005. Both borrowers seeking to obtain homes they could not otherwise afford, and industry insiders seeking monetary gain, were implicated.
Read more about this topic: Causes Of The United States Housing Bubble
Famous quotes containing the words home and/or ownership:
“In 1869 he started his work for temperance instigated by three drunken men who came to his home with a paper signed by a saloonkeeper and his patrons on which was written “For God’s sake organize a temperance society.””
—Federal Writers’ Project Of The Wor, U.S. public relief program (1935-1943)
“They had their fortunes to make, everything to gain and nothing to lose. They were schooled in and anxious for debates; forcible in argument; reckless and brilliant. For them it was but a short and natural step from swaying juries in courtroom battles over the ownership of land to swaying constituents in contests for office. For the lawyer, oratory was the escalator that could lift a political candidate to higher ground.”
—Federal Writers’ Project Of The Wor, U.S. public relief program (1935-1943)